Darryl Broderick

High Court proceedings issued by a borrower, whose residential property was the subject matter of a High Court order for possession, and an alleged trustee, were struck out in a judgment of Judge Rory Mulcahy on 1 March 2024.

RDJ advised the successful defendant, Pepper Finance Corporation (Ireland) DAC.

Background

Wexford Circuit Court had granted an order for possession in respect of a residential property in March 2019. The order for possession was appealed by the borrower and by order of 6 October 2021 the High Court affirmed the order for possession. The borrower then applied for leave to appeal to the Supreme Court but was refused.

In 2022 the borrower and another party, Charles Allen, issued High Court proceedings against Pepper. The plaintiffs in those proceedings claimed that Pepper did not have sufficient title to be entitled to possession of the property in question. It was alleged by the plaintiffs that the borrower had placed the property in a “private irrevocable family trust”, with Mr Allen as trustee, in 2013.

Another claim made by the plaintiff was that Pepper was not entitled to possession because it had not issued the borrower with a “certified, formal letter of redemption”, which declared “all of the alleged contractual obligations and under what authority [Pepper] is holding beneficial title absolute”, as a result of which the plaintiffs could not discharge the debt on the property.

The plaintiffs also claimed that the borrower had an entitlement to use a promissory note to discharge the debt and demanded the production of “wet ink” documents from Pepper.

Pepper brought an application to strike out the proceedings pursuant to Order 19, Rule 28 of the Rules of the Superior Courts and the inherent jurisdiction of the court.

In his judgment, Judge Mulcahy referred to a 2023 decision of the High Court by Judge Eileen Roberts in a case of Allen & Anor. v Bank of Ireland Group Plc. & Ors. The plaintiffs in that case had also claimed that a residential property had been placed in a “private irrevocable family trust”.

Judge Roberts had held in that case that the claims regarding the alleged trust were “hopelessly misconceived”. She went on to say that even if it had been proved that the trust existed, there was no foundation for the claim that placing the property in question in the trust would nullify the charges registered in favour of third parties. Judge Roberts rejected all of the arguments which were made by the plaintiffs in that case, which were similar to those in the proceedings issued against Pepper.

In applying the decision of Judge Roberts, Judge Mulcahy held that the proceedings could only be regarded as an abuse of process. They were an impermissible collateral attack on the order for possession granted by the High Court. The proceedings were ultimately struck out as they disclosed no stateable cause of action and were a clear attempt to re-try issues which had already been determined and were therefore res judicata.

Comment

The two decisions mentioned above serve as further confirmation that “fanciful” arguments relating to “private irrevocable family trusts” and the entitlement to discharge debt through opaque “promissory notes” as well as demands to provide “formal letters of redemption” or “wet ink documents”, are not good reasons for refusing to grant an order for possession or a good basis for challenging an order for possession already granted.

• Darryl Broderick is a partner and head of litigation and dispute resolution at RDJ LLP.